Watermark Home Loans

Watermark Home Loans

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Written by Taylor Sansano
Edited by Sally Jones

About Watermark Home Loans

This profile has not been claimed by the company. See reviews below to learn more or submit your own review.

Watermark Home Loans (NMLS #1838) is an online direct mortgage lender that originates home purchase and refinance loans. The company has been in business since 2006 and is headquartered in South Carolina. Since 2019, Watermark has closed about a thousand home purchase loans a year. The company is licensed in 45 states, with branches in six.

Pros

  • Completely digital application process
  • Pre-qualification
  • Fully remote e-closing
  • 3% down payment options

Cons

  • Doesn’t post rates
  • No ARMs, home equity loans or HELOCs
  • Not available in Alaska, Missouri, New York, Rhode Island or Vermont

Bottom Line

Watermark Home Loans offers an expansive range of mortgage options, including conventional, government-backed and specialty loans, like reverse mortgages for seniors and bank-statement loans for the self-employed. The company also has options for borrowers who don't meet the requirements for a conventional loan.

Rates

Like many mortgage lenders, Watermark Loans doesn’t publish its rates. It does post national average rates — and promises to beat them. The company’s credit and LTV calculator lets you run various credit scenarios and see typical associated rates. To receive a custom rate quote, click the “Get My Rate” button on the company’s website. You will have to answer five or six brief questions about the home you want to buy, its ZIP code and your salary and credit score.

You can also sign up for Watermark’s Rate Watch alerts. This will keep you current on interest rate trends and notify you via email if rates go up or down.

Recent Home Mortgage Disclosure Act data shows that Watermark has slightly lower rates than the national average. Many factors can affect the rate you’re offered, including the economy and your personal finance details. Borrowers with high credit (above 800) and low DTI ratios (below 36%) typically get the best rates, but Watermark does offer programs for borrowers who don’t have great scores or who have limited funds for a down payment.

Watermark Home Loans average home purchase rate vs. national average

YearDifference from national average
2021-0.11%
2020-0.10%
2019-0.03%
Information pulled from public Home Mortgage Disclosure Act data. Rates reflect noncommercial home purchase loans only.

Application process

Watermark Home Loans touts a wholly digital mortgage application process. To start an application online with Watermark, just create a profile and follow instructions on how to upload your documents to its secure platform. Or, if you prefer to start by phone, a loan officer will help you work your way through. Its e-closing and remote notary services also make it possible to obtain a mortgage without ever leaving your home.

Watermark Home Loans application features

FeaturesAvailability
Online application
Mobile document upload
Physical branches6 states
Publishes minimum rate on website
Rate lockNot disclosed
Pre-qualification (no hard credit pull)
Certified approval letterNot disclosed

Loan types

Watermark Home Loans offers fixed-rate conventional loans (no adjustable-rate loans), FHA loans, VA loans, USDA loans and jumbo loans, and it does a significant amount of refinancing. It also offers non-qualifying mortgage loans and other specialty programs.

For the self-employed who don’t have W-2s to prove income for a conventional loan, Watermark underwriters look at a combination of cash flow, assets and bank statements. There are low-interest options available.

In 2021, potential Watermark borrowers initiated 1,337 home purchase applications. About 3% were denied, which is a lower denial rate than the industry shows as a whole.

About 85% (1,138) of these home purchase applications closed, and zero preapprovals were denied — so it may pay to be preapproved if you’re looking for reassurance that your deal will go through.

Loan applications for home purchases only by year

202120202019
Home purchase applications1,3379821,358
Home purchase loans closed1,1387521,043
Home purchase applications denied423662
Home purchase preapprovals denied052
Information pulled from public Home Mortgage Disclosure Act data. Includes conventional, USDA, VA and FHA mortgages.

Refinancing

In the past three years, refinancing represented a large portion of Watermark’s business. In 2021, this type of financing accounted for 83% of its loans. Rates were low then, and there was increased demand from homeowners who wanted to lock in a lower rate.

With rates rising this year, demand shouldn’t be so high, but it can still make sense to refinance if you can find a rate that’s significantly lower than what you have. Do consider closing costs, though; your loan advisor can help you weigh the pros and cons.

Home purchase vs. refinance loans by year

202120202019
Home purchase loans12.00%8.71%30.78%
Refinance loans59.77%79.20%49.72%
Cash-out refinance23.54%12.07%19.47%
Information pulled from public Home Mortgage Disclosure Act Data. Includes conventional, USDA, VA and FHA mortgages.

Requirements

Watermark is transparent about requirements for most of its loans. Conventional loans require a 3% down payment and a minimum credit score of 620, which is typical across the home loan industry. Credit scores below 620 may be accepted on FHA loans, but you’ll need to put 3.5% down. VA and USDA loans require no down payment.

Another thing lenders take into account is your debt-to-income ratio (looking for 36% or lower). Watermark does have non-qualifying loans available for those who can’t meet this requirement, including interest-only options. Both non-qualifying loans and government-backed loans (except USDA) allow higher debt-to-income ratios.

National mortgage requirements by type

Min. credit scoreMin. down paymentCompare with other lenders
ConventionalTypically 620Typically 3%Mortgage lenders
FHA5003.5% with 580 credit scoreFHA lenders
VASet by lender (often 580)0%VA lenders
USDASet by lender (often 640)0%USDA lenders

For other loan types, read our jumbo loans guide.

Cost and fees

Watermark charges origination fees, which are typically 0.5% to 1% of the loan amount. Other fees you may have to pay at closing include appraisal fees, real estate taxes and mortgage insurance premiums. In some states you’re required to hire an attorney for real estate transactions, so in those states you’ll also pay attorney’s fees. The closing costs on a home purchase often add up to 2% to 5% of the loan amount.

Shortly after you’re preapproved for your mortgage, you’ll receive a Loan Estimate that itemizes each of your closing costs. Later in the process, three days before the closing, you’ll receive the Closing Disclosure. This document provides an exact account of what you’ll be expected to pay that day.

FAQ

What is Watermark Home Loans?

Watermark Home Loans is an online-first direct lender that originates mortgages in most states across the country. It offers conventional and government-backed loans as well as non-conforming loans. Its process is 100% online, from application to secure portal upload to e-closing with remote notary service.

Is Watermark Home Loans legit?

Since 2006, Watermark Home Loans has offered home loan products to buyers across the U.S. Today it provides customers in 45 states with conventional and federal loans and refinancing.

Where is Watermark Home Loans available?

Watermark Home Loans is licensed in 45 states. It’s not available in Alaska, Missouri, New York, Rhode Island or Vermont. It also has eight branch locations in six states: Arizona, California, Hawaii, Maryland, Nevada and Texas.

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Watermark Home Loans Company Information

Company Name:
Watermark Home Loans
Website:
watermarkhomeloans.com